Retirement Savings Goal Calculator

One of the methods of retirement planning is just having a look what you are currently having with you, your accumulations till date and if they are sufficient enough to meet your future retirement objectives. One can answer it in just saying 'a lot of money', but it does not take into consideration various factors like:

• When are you going to retire?
• How many years you are expecting to live after your retirement?
• What expenses would be there after your retirement and by what amount/ percentage they are expected to increase?
• How much time do you have to save/ invest money?
• What would be the relation between your expenses now and then?

Before starting discussion, let's know how time is related to money: Time value of money

If we ask someone to choose between Rs one lakh now and Rs one lakh after 5 years, the answer would obviously be Rs one lakh now. This is because of the reason that one can increase the value of Rs one lakh taken now in five years by investing them somewhere and it is for sure that if one invests in good vehicle, it is going to be increased by 25 to 50 percent even if conservative approach of investment is used.

This is the time value of money. It can be concluded that present value of money is worth than the same future value due to the potential earning capacity of money.

Now let's answer the above questions:

• When are you going to retire? In India, as far as government/ PSU sector is concerned, the age is 60 years generally. Some states may follow 58 years system and some where it can be 65 years too. The private sector age also varies from 58 to 65 years.
• How many years you are expecting to live after your retirement? Well, it is quite difficult to ascertain but a general rule of thumb takes it to be 14 years.
• What expenses would be there after your retirement and by what amount/ percentage they are expected to increase? Your expenses today can be ascertained by self and then as per the inflation rate, the increase in expenses can be calculated.
• How much time do you have to save/ invest money? This really depends on your age presently and your expected retirement age. If you are going to retire at the age of 60 and you are 27 years right now, you have 33 years to save money.
• What would be the relation between your expenses now and then? Well this is purely subjective and may depend on your personal spending habits and also on the inflation rate.

For making your retirement plan successful, you need to save and invest a specific amount periodically without failure and do not withdraw any of the amounts out of it. Your salary may be increasing with time but amount to be invested will remain the same and hence the burden on you will decrease slowly. It is also advised to have a medical claim policy well maintained from the early ages which can help you to have financial assistance for your medical bills.